No one can deny that CSR or corporate social responsibility is an increasingly hot and powerful topic. Not only in the US and the UK, the Economist Intelligence Unit found CSR to be also rising in corporate agendas globally.
With everyone’s eyes on it, it is hard not to have an opinion on it. Are you one of those who are sceptical, wondering whether CSR is just another PR gimmick to help businesses make more profits, or do you truly have faith that CSR will shape a better future for business and society? Let’s explore the topic some more before you decide.
Perspective 1: CSR and consumers
To begin with, fundamentally, is CSR powerful enough to influence consumers and investors, and thus, the business? With rising awareness of business ethics today, people’s perceptions of a company can be affected even more by how a company balances how much it takes with how much it gives back.
Companies that implement CSR, like Unilever with its sustainable living plan, have enjoyed increased growth and profits. In contrast, evidence also confirms that those making missteps in this area, like Nike, which has been accused of using sweatshop labour, have suffered a great deal.
Research studies that support this include the Pulse Survey by the Reputation Institute, which found that CSR was responsible for more than 40 per cent of a company’s reputation and 42 per cent of people based their feelings about a company on the firm’s CSR.
McKinsey also found that 95 per cent of CEOs felt that society now has higher expectations of businesses taking on social responsibilities than five years ago. About 93 per cent of people want to see more of the products and services they use supporting worthy social/environmental causes.
About 31 per cent of global consumers believe businesses should change the way they operate to align with social and environmental needs. About nine out of 10 consumers want companies to go beyond the minimum standards required by law to operate responsibly and address issues.
Perspective 2: CSR and employees
With Gen Y and millennials making up more of the modern workforce, it is time to pay attention to what they think is important. Research has found that 88 per cent of millennials chose employers based on strong CSR values, and 86 per cent would consider leaving if the company’s CSR values no longer met their expectations. Business schools, like New York University’s Stern Business School, added courses related to CSR to keep up with their students’ rising demand.
How about other groups in the workforce? Net Impact found that 53 per cent of workers thought that “a job where I can make an impact” was important to their happiness. About 35 per cent would even take a pay cut to work for a company committed to CSR. Another study found that the more actively a company pursues worthy environmental and social efforts, the more engaged its employees are.
Perspective 3: CSR and community
CSR isn’t only about taking employees out on a charity trip or giving away money to the community. It is also about being conscientious and aware of the way you do business and interact with your stakeholders. According to Forbes, the 10 companies that are best at this are Microsoft, Google, Walt Disney, BMW, Apple, Daimler (Mercedes-Benz), Volkswagen, Sony, Colgate-Palmolive and Lego.
But can small companies excel in CSR efforts too? Yes, of course. One great example is TOMS, a shoe company founded in 2006 by Blake Mycoskie, who was then only about 30 years old. TOMS caught the market’s attention with its “one-for-one” business model. For every pair of shoes you buy, a pair of shoes is given to a needy child.
When a customer bought shoes from TOMS, they felt that they were not just spending, but giving. The employees working at TOMS did not feel they were selling shoes, but making changes in the world. Successfully merging CSR into the business they do every day, TOMS has already given over 10 million pairs of new shoes to children in need. Blake, TOMS’ chief shoe giver, encouraged other businesses to adopt the one-for-one model where they can.
So that is a strong indication that CSR is not simply a superficial matter, but has a solid impact on consumers, employees and communities. There is a concrete rise in awareness of CSR and real demand for it. Greater than any strategy, CSR can give a business a competitive advantage while also making positive changes to the community and the environment.
I too have strong faith in CSR. Whether you have passion for making profits or passion for making the world a better place, CSR can benefit you greatly and bring these previously accepted very different strands of business together successfully.
Orapun Parapob Gilman is a senior strategic human resource and organisational development consultant at APMGroup. She can be contacted at Orapun_p@apm.co.th.